Question

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $280,000, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Naranjo Compa four jobs, Data relating to these four jobs follow: Job 39 Job 40 Job 41 Job 42 Beginning balance Materials requisitioned Direct labor cost Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the Naranjo being paid was growing dimmer. Naranjo deaided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month Required: 1. Calculate the overhead rate based on direct labor cost. 25,900 $35,100 $18,00D $600 18,900 22,600 11,200 15,500 10,000 19,700 5,850 ,400 50 | V % of direct labor cost Feedback 2. Set up a simple job-order cost sheet for all jobs in process during June. Naranjo Company Job-Order Cost Sheels Job 39 ob 40 Job 41 Job 42 Balance, June 1 2600V Direct materials18.90022600 1100 15.500 Direct labor 1000019005.0506400 Applied overhead 25900 35,100 18,000 Total

Answer 1

2
Job-Order Cost Sheets
	Job 39	Job 40	Job 41	Job 42
Balance, June 1	25900	35100	18000	600
Direct materials	18900	22600	11200	15500
Direct labor	10000	19700	5850	6400
Applied overhead (50% of direct labor cost)	5000	9850	2925	3200
Total	59800	87250	37975	25700